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The purposeful creation of poverty

The purposeful creation of poverty

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  • Advice

    The purposeful creation of poverty

    There is obvious truth in the argument that U.C was created to reduce the UK's benefits bill and drive people into work through creating the “heat or eat” levels of poverty that it delivers. One could say that U.C creates a “work 50 hour’s – or starve” mentality – both viewpoints have merits. The problem is that the designers of the U.C system have assumed that there are jobs for people to go into – this is not always the case and so many are forced into selling items just to keep the heating on. Figures from FullFact.Org state that “Trussell Trust foodbank use has increased by 55% in areas where Universal Credit has been rolled out”.


    Simply insufficient funds to manage.

    As of June 2021, the standard monthly rate for a married couple without children is just £596.58 per month (£137.62 per week). This falls well below the minimum amount needed to live a satisfactory life in the UK. Every year, the Joseph Rowntree Foundation (JRF) publishes a Minimum Income Standard (MIS) which calculates how much money the general public believes is needed to calculate an average amount to survive. By 2020, it is estimated that a married couple would need £1908 per month to survive. This is almost four times the sum paid by Universal Credit. The truth is that U.C was bought in to reduce the government benefits bill, which means less money for those who need it most.

    If you are a private tenant, then the chances are that the whole amount of benefit you receive won't even cover your rent, never mind paying for such “luxuries” like heating, food or water.


    Work allowance

    You may be allowed to earn some money without your UC being affected if you have children or limited work capacity.


    Better-Off-By Example

    A couple, both over 25, rent a house in Spalding, Lincolnshire, Band C. They are both fit to work yet unemployed. Let us assume their rent is £650/month, Food £350/month, sundry expenses such as insurances, hairdressing, clothing of £200/month and utilities £200/month – a total of £1400 per month – almost £600 below the independently calculated minimum - no take-aways, no luxuries, no car, no children, no hobbies.


    If they were both receiving U.C, they would receive £596.58 per month – this creates a simple choice between food, heating the home or paying the rent. There is no work allowance, as such their U.C is reduced by 55p for every £1 earned. If one of them worked for 40 hours at £8.91/hr they would earn £1544 a month.


    After paying estimated costs such as full council tax (£150/month), PAYE and National Insurance of (£100/month each), let's take off the “lost” U.C of £600 (rounded up for ease) – so better off by £594 a month. If they are working 160 hours a month that equates to being “better off by” £3.71 per hour (out of interest the break-even point to meet the £1908 minimum means one person working almost 50 hours a week).


    So, what is the solution?

    The answer is simple, unless they want to accept the “heat-or-eat” dilemma then one must work 50 hours a month and/or look for work cash-in-hand and scrape money from wherever they can. By not declaring this work they are acting illegally. We obviously cannot condone this but understand that for many it is a simple requirement for survival.

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